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Renault-Nissan Alliance posts record €3.8 billion in synergies in 2014, up 32.4% from 2013; role of CMF

The Renault-Nissan Alliance posted record synergies of €3.80 billion ($4.25 billion) in 2014, up 32.4% from €2.87 billion the previous year. Purchasing, engineering and manufacturing were the biggest contributors. The launch of the Alliance’s first Common Module Family (CMF) vehicles (earlier post), as well as the recent convergence of four key functions—Engineering; Manufacturing Engineering & Supply Chain Management; Purchasing; and Human Resources—helped drive synergies in all three areas, said Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance.

Synergies are generated from cost reductions, cost avoidance and revenue increases. Only new synergies (not cumulative) are taken into account each year. Accounting for synergies helps Renault and Nissan determine if they are meeting their performance objectives.

Renault and Nissan converged the four functions on 1 April 2014. (Earlier post.) While Renault and Nissan remain separate companies, each function is led by a common Alliance executive vice president. Due to the convergence, the Alliance expects to overachieve on its goal of generating €4.3 billion (US$4.8 billion) in annualized synergies by 2016. That’s up from €1.5 billion (US$1.7 billion) in 2009.


Common Module Family (CMF). Common Module Family is the Alliance’s system of modular vehicle architectures. CMF enables Renault and Nissan to build a wider range of vehicles from a smaller pool of parts, while at the same time increasing customer choice and quality. Small vehicles are based on CMF-A, while mid-sized vehicles utilize CMF-B, and the largest vehicles use CMF-C/D.

In February 2014, Nissan launched an all-new version of the popular Qashqai crossover in Europe. The Qashqai is built on CMF-C/D and is the third CMF model for Nissan. In 2013, Nissan launched the Rogue SUV in the United States and X-Trail crossover SUV in China. Earlier this year, Renault launched its first CMF vehicles: the New Espace and the Kadjar. Both vehicles are built on CMF-C/D as well.

In 2015, Renault will launch the Kwid in India. The Kwid is the first Alliance car built on the CMF-A architecture and will be produced at the Renault-Nissan plant in Chennai. Datsun will launch a vehicle on the same platform in 2016.

By 2020, the Alliance expects 70% of its vehicles to be built on CMF architectures.

Cross production. The cross production of vehicles is also a major driver of manufacturing synergies. Cross production is expected to accelerate across the Alliance following the rollout of the Alliance Production Way (APW) at all plants around the world by the end of 2015. The APW manufacturing system is the result of best practice sharing throughout the organization and allows plants to make better use of their capacity by enabling them to produce both Renault and Nissan vehicles.

In 2014, Nissan began production of the Rogue crossover in Renault’s plant in Busan, South Korean, to meet stronger-than-expected demand in the US.

The AVTOVAZ plant in Togliatti, Russia, is the Alliance’s biggest production base in the world with capacity of nearly one million vehicles per year. The plant produces vehicles under four brands—Lada, Renault, Nissan and Datsun. The Alliance owns a majority stake in the joint venture that controls AVTOVAZ, Russia’s largest automaker.



Some alliances work better than others. This one is a good example between 2 very different cultures.

The Big 3 may soon have to form an alliance to compete?


"The Big 3 may soon have to form an alliance to compete?"

Toyota, VW and GM have nothing in common. Three different cultures, it would be a mistake.

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